if you are on linux, then yes you will have to recompile php and add the --with-gd switch to tell it to compile php with gd support, using the bundled gd libraries that come with php now.
if you are on windows, you will want to look at your php.ini file, and see what folder it says extension_dir is set to, then make sure that the folder they show has a file called php_gd2.dll in it. then in your php.ini file, uncomment (by removing the preceding ; ) the line ;extension=php_gd2.dll